The latest news about cryptocurrency markets is a story of FTX’s recent agreement to acquire crypto lender BlockFi, which has secured a $400 million credit facility from the exchange. This news points to the volatility of the crypto market and BlockFi’s search for a savior. What are the implications of this deal? And how will this impact future adoption?

FTX gives it the option to buy crypto lender BlockFi

FTX has signed a deal giving it the option to purchase crypto lender BlockFi for up to $240 million, as a result of its recent credit facility. The deal comes as the cryptocurrency market continues to suffer after falling by more than $2 trillion in less than seven months. As a result, companies that trade or lend crypto have also suffered. Most recently, BlockFi announced it was cutting 20% of its workforce, a move that comes at a time when many companies are facing similar problems.

The recent cryptocurrency market volatility has impacted crypto lenders, and the failure of hedge fund Three Arrows Capital has not helped the company’s situation. In addition, the embattled cryptocurrency company Celsius froze customer deposits two weeks ago, leading to a rise in client withdrawals. While BlockFi had no exposure to Celsius, it did suffer losses of $80 million a week ago. Three Arrows has also filed for bankruptcy, and the loss suffered by BlockFi will be included in the bankruptcy filing for Three Arrows Capital.

BlockFi secured a $400 million credit facility from FTX

Recently, BlockFi, a leading cryptocurrency lending platform, secured a $250 million revolving credit facility from FTX, the leader in digital assets trading. This credit facility will strengthen BlockFi’s balance sheet and ensure its long-term stability. CEO Zac Prince said the credit facility reinforced the company’s commitment to its customers and clients. BlockFi provides credit services to markets with limited access to simple financial products. Its innovative approach combines competitive rates with institutional benefits.

This credit facility was secured after BlockFi reached a $300 million valuation. BlockFi’s valuation has been a moving target. Some reports had it valued at $25 million. The new valuation gives BlockFi a variable price of up to $240 million. FTX also has an option to purchase the company for up to $240 million. This new deal is significant for BlockFi as it signals the potential for more investment from FTX.

BlockFi points to crypto market volatility

Cryptocurrency company BlockFi cited the collapse of cryptocurrency hedge fund Three Arrows Capital and the embattled crypto company Celsius as reasons for the sudden market drop. The embattled Celsius frozen customer deposits two weeks ago, causing a dramatic uptick in client withdrawals. BlockFi had no exposure to Celsius, but it’s believed that it lost around $80 million, triggering the collapse. Three Arrows’ collapse will also affect BlockFi.

While the cryptocurrency market is volatile, companies like BlockFi are trying to ease the volatility by providing traditional banking services in the crypto space. The company is based in the USA and uses the Gemini Exchange for its crypto custodial services. The Gemini Exchange was founded by the Winklevoss twins, making it one of the safest exchanges in the world. Gemini also recently received a bank license, and BlockFi has secured financing from big players in the financial world.

BlockFi’s search for a savior

FTX has signed a deal to buy crypto lender BlockFi, but it’s not a deal that guarantees that it will be able to keep its customers’ money. However, the move may give it a boost in the short term as the crypto market continues to fall. The deal, which would give FTX the option to purchase BlockFi for $480 million, is not the first such offer made by FTX in recent weeks. In May, Celsius Network suspended customer deposits and Three Arrows Capital Ltd. recently went through trouble. And on Friday, Voyager Digital Ltd. froze customer withdrawals.

While the deal is not likely to satisfy the venture investors, it could still result in the protection of client funds. BlockFi’s CEO, Mark Prince, has been vocal about the need to protect customer funds. Ultimately, FTX’s acquisition of BlockFi will benefit the adoption of crypto financial services around the world. While the FTX deal will not bring in any immediate cash, it will help FTX make a decision on the future of the crypto market.

Also Read:Top Cryptocurrency News Today